The new loan, expected to close this month, will mature in June 2009. It includes a floating rate interest period of up to three months in which it will bear interest at a floating rate of Libor plus 1.5%. At the end of the three months, it will revert to a fixed interest rate of 4.55% for the remainder of the term.
Last week, the company obtained a 10-year, $43-million loan at a fixed rate of 5.06%, secured by the REIT's property at 3 Beaver Valley Rd. in Wilmington, DE. These funds will be used to refinance two existing loans on the property.
Referring to the newest loan, Nicholas S. Storsch, American Financial's president and CEO, says, "This financing will provide new money that can be invested directly in bank branch and office building acquisitions. The 4.55% fixed rate is very favorable and should provide a significant spread against the stabilized yield of acquired properties. We have structured our balance sheet so that we have almost no maturing debt, apart from scheduled amortization payments, between now and October 2007," he adds. "We believe this is quite important, given the unpredictable nature of near-term interest rate movements."
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
